Thus article is aimed at HR Managers and senior hiring managers and will hopefully give you some value and insider information when selecting a head-hunter for a specific task.One of the periodic headaches for any HR Manager or hiring manager is who to choose when a retained Executive Search is required. It’s a tricky one, I have both commissioned searches (up to £350k salaries) and sold search services. Based on my experience as a customer and a head-hunter, here’s a brief guide:

First thing to consider is when it is appropriate to use retained search over success based recruitment. Definitions, retained search is when a supplier is solely appointed to a project and their fee is split into an initial project retainer and one or more other payments either at stages or on success. Contingency or success based recruitment is when one or more suppliers are given the vacancies to fill and their work is paid for on successful delivery. A general definition is that a ‘Recruitment Consultant’ tends to work on a contingency basis and a “head-hunter” or “search consultant” tends to work on a retained basis. However, that is not always the case as depending on sector you get RCs who also offer, and are very capable head-hunters when appropriate and head-hunters who will be willing to work on a success only basis when it is appropriate. Choose on specialisation and reputation and not on job title.

When to use retained search?

A general rule of thumb I have always followed is consider retained search when the position is either business critical, senior, a very rare skill set or where confidentiality is required. If it is absolutely critical that you have the best available candidate in the market at that time in the job by a certain date then retained search is definitely the route to go down. Search and Selection Consultancies essentially sell risk management.

What service to demand/expect?

You are not just paying for the role to be filled. You are paying for the role to be filled by the best candidate available (when compared to their peers) at that moment in time and who is interested in the opportunity. This means that when you hire Mr Snooks you can rest easy knowing that Snooks has been selected against a thoroughly vetted shortlist that was based on a quality long list of potential candidates initially approached. Depending on the service level agreed as a minimum you should expect to be:

1/ provided with a shortlist of candidates selected from a long list (which should also be provided)

2/ comprehensive report on the reaction of candidates in the market to the client’s position and brand both positive and negative

3/ detailed interview and personal notes on each shortlisted candidate, unless exceptional circumstances occur the head-hunter should have met and extensively interviewed the candidate at least once.

4/ reference and document checking as well as qualification checking should be provided

5/ management of the candidate throughout the offer stage and throughout the notice period

6/ professional communication to all unsuccessful candidates

7/ evidence of the activities carried out during the search

8/ some after sales service.

Who to choose?

I’m going to make myself unpopular with some of my colleagues here. If you don’t do anything else, choose the head-hunter and not the company they work for. Head-hunters are like lawyers, they get to know their area of specialisation, they become respected within that area, they become trusted in that sector and within the pool of professionals within that sector, when they move their business tends to follow them. Appoint on this reputation and expertise of the delivering consultant. Remember, big names and fancy brands are OK if you want to make a big noise in the market and keep shareholders happy but if this isn’t a requirement, time spent finding niche experts will pay dividends. Over the last 8 years, more than at any other time, there has been huge churn within the search industry. Many household name companies have struggled and as a result, many of the expert consultants and head-hunters who worked for them have either left to set up their own businesses or are working with sector specific companies who, due to their smaller cost base, will be more willing to pay higher rates of commission to the best head-hunters. Ask your colleagues, who would they recommend as a head-hunter in the sector? Check on LinkedIn, it’s now a highly sophisticated source of information of this type. Another benefit is the smaller cost base of the independent specialist company means that your fees are usually less. You are not paying for Mayfair offices, a fleet of powerful cars, teams of researchers and admin or expense accounts, these businesses will be lean and mean and have seen a growth in recent years at the expense of the ‘big boys’. Above all remember that the amount of money you throw at the search doesn’t necessarily translate into successful delivery.

What to pay for?

Ensure you know what you are paying for. In the past some companies have charged excessively for additional expenses. Phone bills, paper, photocopying, secretarial support, travel are all extras which some search companies will charge you for. One business I had dealings with in the past (no, I won’t tell you who it was)once hit their client with a ‘supplemental recruitment charge’ of £10k as they were a few K short of their target that month and bolted the charge onto the back of a search, the client paid it without question. Now sometimes these extras will be necessary and the search company might genuinely require assistance to pay for them. For example, you decided to take a suite of rooms at The Connaught for candidate interviews or there is a requirement to interview candidates in Australia etc. However, all these additional expenses can and should be discussed and agreed on before the search starts. Go through the terms of business with a fine toothed comb, if you feel it is necessary, get a procurement or commercial expert to help you with the terms and negotiation. You are the customer here.

Guarantee and after sales support

Most companies involved in recruitment offer a rebate scheme should the candidate leave . This is typically on a sliding scale and can be ayting from a week to 6 months. I offer a 12 month free replacement if the person I headhunted and placed decides to leave the business within the first year of employment. It is beyond me why this is so rare in the industry. Surely if you are doing your job properly then you should put your money where your mouth is. It also ensures after sales support. A new employee is a change in the business environment and change is always an issue. It is very important that the head-hunter, with the agreement of all parties, remains in touch with the individual hired after they start the new role. I have seen and experienced several incidents when after sales communication has prevented the hire from leaving or failing in the role, especially when the new hire is not given the support required, it often takes a 3rd party to highlight the issue to the employer or make HR aware so they can take action. This is after sales service and it can be highly effective if professionally used. I always offer it, it beats me why it’s so rare in the industry.

Which method you choose and which search company you appoint always ensure it and they are fit for purpose. High risk, confidential, senior, business critical, rare skills or bum-on-seat-by-definite-date then absolutely consider retained search. Otherwise contingency should do.

Next episode – “How to set up an In House Search Function, The Basics”